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Old 01-11-2016, 12:36 PM   #9
Franchise Player
Join Date: Dec 2006
Location: Calgary, Alberta

Its really hard to say for sure, because it really depends on your time horizon and what you are saving for. If the TFSA is being used to save for big ticket purchases or rainy day funds then you shouldn't use the RRSP for those things.

Its not really an either/or kind of thing though. Instead it all comes down to use. I prefer the idea of the longer term tax savings and like the TFSA for that reason. The problem is that the RRSP allows you to save more today because of the tax-deferral. so while its fully taxable when you withdraw the funds, not paying taxes today is obviously good. People really need to be doing both though; either invest your money in an RRSP and then use the tax return to fund the TFSA, or simply split your contributions to take advantage of the TFSA as well as the RRSP. If you can max your RRSP, you should be saving enough in taxes to fill the TFSA though (at least in the highest bracket).
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